The week starting...Sep 10th 2007

The US markets got beaten badly on friday. A bad cue to start the week with. We have broken down from the broadening formation on hourly charts. As indicated in the earlier post, this is a bearish pattern. Important NIFTY levels to watch out for 4470, 4460, 4400, 4350. We should have a gap down opening on monday. Its better to play the wait and watch game. The short term trend is still up. The volatility still doesnt seem to be dying down. Expect a bounce from one of these levels on monday. If these are broken decisively, we will be breaking away from our short term uptrend.

Play the wait and watch game on monday. We will pick up stocks as they become ripe to buy. We will wait for one day to get into the right direction. Remember there is no rule that you should trade everyday. Sometimes its better to wait it in the sidelines and watch the action.

We will stick to the following calls for 1 day only. Based on mondays' close, we will devise trading strategy for the coming days.

India cement - Short on break of 254. Target 247. Target 2 - 242

Zee - Below 298 will crash. Target 1 - 278. Minor support at 288, 281. If it manages to stay above 300 and closes here, we can buy again for coming days.

SBI - Its resting at 1616. Has looked to break 1800+. Will be interesting to see if it manages to stay near this level.

RPL - 119 - 116 is a good support range. A maximum dip of upto 110 is slightly possible. The trend is still up. Use dips to build positions in this stock.

UNION BANK - I dont expect this stock to fall below 133 tomorrow. Use gap down opening to buy at intraday lows. There is excellent support at 133. First support at 140. 135 is also the 200DMA. Buy around 133 - 135 range tomorrow for intraday.

Data on institutional trade shows that even when market broke down from the trading channel, FIIs were net buyers over the past few days. Strongly suggesting, that the trend is still up. Do some bottom fishing on monday. NIFTY can dip upto 4400 or slightly below and bounce back.

If you need advise on some specific stock, leave your mail ID and a message, I will get back to you with my analysis.